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Adams Corporation manufactures appliances. This year, the government increased the corporate tax rate by 5 percent. Adams responded by raising its prices. Customer demand remained

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Adams Corporation manufactures appliances. This year, the government increased the corporate tax rate by 5 percent. Adams responded by raising its prices. Customer demand remained steady, therefore, Adams's before-tax profits increased and after-tax profits remained constant Required: a. Who bears the incidence of the increase in Adams's corporate tax? b. How would your answer change if Adams did not raise prices, resulting in a decline in its after-tax profits and a drop in the market price of its stock

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